An investigation into the impact of sustainable supply chain management practices on the performance of the Gulf Cooperation Council Petrochemical industry

Abstract

The Gulf region is the powerhouse of oil industries, which their economies heavily rely on. Owing to the successes built in the Gulf region as the leading oil supplier to the world, in less than fifty years, the region has become among the top ten countries supplying the world with petrochemical products. Eighty per cent of their products are exported to the global markets, contributing heavily to their GDP and creating many jobs in the region. Companies related to the oil industry continually seek to enhance their processes’ effectiveness to create more value. Many scholars and practitioners, even some governments, are looking for supply chain management as a critical business function for improving and creating more value.

However, the heavy economic reliance on these industries – besides the reliance on fossil fuels as the primary source of energy in the region with less than one per cent participation in renewable energy – has made the countries in the Gulf region among the top twenty-five air polluted countries. Therefore, sustainability initiatives must be considered in these industries to improve the current situation and enhance the status of companies in global markets, as sustainability is important for success in different markets.

Due to the impact of these industries on climate change and the discharge of greenhouse gases, governments in the Gulf region and local and international organisations are working to help these industries improve the situation by enforcing regulations, standards, and practices and monitoring their environmental performance. Currently, governments in the Gulf region are regulating and monitoring the performance of the industries and automatically collating readings related to the level of emissions from these industries. The region has also committed to international agreements like The Global Methane Pledge and COP26.

Therefore, this thesis aims to identify the best sustainable supply chain practices, performance measurement methods, and the drivers and barriers to implementing sustainability in the Gulf region. Semi-structured interviews were conducted with participants from the petrochemical industry in the GCC. The present study seeks to contribute to the knowledge about the industries in the Gulf region by creating a better, deeper understanding of how to implement the best sustainable supply chain practices under four pillars: digitalisation, value creation, risk management, and partnership. Plus identified in one matric the key performance indicators to be measured include sustainability and drivers and barriers to implementing sustainability in the petrochemical industry in the Gulf region as a unique context. It also contributed to the Institutional Theory by identifying new sources of pressure to organizations to implement best practices and improve their performance; it identifies self-regulator practices a new informal coercive pressure due to the needs of petrochemical companies to compete in global markets. Plus, partnership as a new and crucial source of mimetic pressures of institutional theory.